TotalEnergies snaps up 50% stake in SapuraOMV for RM4.3bil

 

TotalEnergies’ acquisition of a 50% stake in SapuraOMV potentially values the JV at US$1.81 billion (RM8.56 billion).

PETALING JAYA: France’s TotalEnergies has signed a deal to acquire a 50% stake in Sapura Energy Bhd’s unit, SapuraOMV Upstream Sdn Bhd (SapuraOMV), for US$903 million (RM4.27 billion).

However, the Paris-headquartered oil and gas (O&G) giant is acquiring the 50% interest from OMV AG, an Austrian integrated O&G company, rather than from financially distressed Sapura Energy.

SapuraOMV is a 50:50 joint venture (JV) between Sapura Energy and Vienna-based OMV.

In a statement yesterday, TotalEnergies said it is acquiring the stake in the Malaysian independent gas producer and operator for a consideration of US$903 million which includes the “transfer of a US$350 million (RM1.66 billion) loan granted by OMV to SapuraOMV”.

It is not immediately clear the implications of this US$350 million transfer on the RM15.5 billion debt owed by the Practice Note 17 (PN17) company to various financial institutions and vendors.

To pare down its massive debt, Sapura Energy indicated last year it was considering the sale of some of its assets including its 50% stake in SapuraOMV for RM2.25 billion.

TotalEnergies’ proposed acquisition potentially values the JV at US$1.81 billion or RM8.56 billion and would be a windfall if Sapura Energy decides to divest its stake.

In its statement, TotalEnergies did not indicate if it was also eyeing Sapura Energy’s equity interest in SapuraOMV.

The transaction is subject to customary conditions precedent including regulatory approvals. It is expected to be completed by the end of the first half of 2024.

Sapura Energy gets a lifeline

Last December, Sapura Energy was thrown a lifeline when Bursa Malaysia Securities granted a second extension of up to May 31, 2024 to submit its PN17 regularisation plan, which was initially due on Nov 30, 2023.

“The extension of time would enable the company to continue building a robust regularisation plan based on the ongoing debt restructuring exercise,” said Sapura Energy in a bourse filing on Dec 14.

SapuraOMV’s main assets are its 40% operated interest in block SK408 and 30% operated interest in block SK310, both located offshore Sarawak. The development of the Jerun gas field in block SK408 is on track for startup in the second half of 2024.

Its operated production in 2023 was about 500 million cubic feet per day of natural gas, feeding the Bintulu LNG plant operated by Petronas, as well as 7,000 barrels per day of condensates.

The JV also holds interests in exploration licenses in Malaysia, Australia, New Zealand and Mexico where a discovery was made in 2023.

“We are pleased to strengthen TotalEnergies’ position in Malaysia by becoming a shareholder of SapuraOMV. Over the past few years, we have developed a strategic international partnership with Petronas, the national oil company of Malaysia,” said TotalEnergies chairman and CEO Patrick Pouyanné.

“With their low production costs and low greenhouse gas intensity, SapuraOMV’s assets will perfectly fit into TotalEnergies’ portfolio and participate in meeting the growing demand of gas in Asia,” he said.

In Malaysia, TotalEnergies owns interests in two production sharing contracts (PSCs) in the exploration phase. In June 2023 it signed an agreement with Petronas and Mitsui to develop a carbon storage project in Southeast Asia and evaluate several carbon dioxide storage sites in the Malay Basin.

Sapura Energy’s shares ended 10% or half-a-sen lower at 4.5 sen yesterday, valuing the group at RM826.92 million. - FMT